Wednesday, January 30, 2008

Hindi Daily 'Dainik Jagran' has come up today with a news about probable increse in the pay of the Central Government employee. According to its news article increase will be around 3.2 to 3.3 times of the current pay. 6th CPC is going to give better pay and facilities to senior officers. This appears to be copy of the article Pot of gold for babus that came in Indian Express

As Indian Railways readies the Budget for 2008-09, one of the biggest worries it faces is how to keep the profitability momentum with the prospect of wage bill inflating by about Rs 9,000 crore on account of the Sixth Pay Commission.

In the current fiscal, the Railways –which employs 1.4 million workers--has a wage bill of Rs 27,145 crore, including Rs 18,985 crore on staff costs and Rs 8,160 crore on pension charges. The wage bill is about 38 per cent of its gross traffic earnings. When the Fifth Pay Commission came into effect, the Railways wage bill swelled to Rs 14,141 crore (FY98) from Rs 10,515 crore (FY97).

The Fifth Pay Commission had recommended a 31-per cent increase in base salaries. “On the same lines, if the Railways were to provide for a 30-per cent hike in wages on account of the Sixth Pay Commission, we are staring at Rs 9,000 crore increase in our wage bill,” said official sources.

The impact of the fifth Pay Commission effective 1997-98 was strong enough to warrant a reference in the 2001-02 Budget speech made by the then Railway Minister. “Internal resources of railways have also suffered a severe and permanent jolt immediately after implementation of the Fifth Pay Commission recommendations,” Ms Mamata Banerjee had stated.

Thus though there are questions on exactly when the Government would implement the pay hike and to what extent, one thing remains certain: it would be difficult to maintain the current level of operating ratio, more so when funding from Central finances is unlikely to go up substantially. According to former Railway Finance Commissioner Ms Vijayalakshmi Viswanathan, “The impact is likely to be spread over three years, particularly on account of pension.”

The Railways pension fund, which opened at Rs 976 crore (1997-98) went down to Rs 318 crore (1999-2000), and Rs 32 crore (2001-02).

Saturday, January 26, 2008

Haryana will be the first State in the country to implement the report of the sixth pay commission, State's Finance Minister Birender Singh claimed on Saturday.

"We will implement the report soon after it's receipt and as a result of it the employees of the State Government will get more salary as compared to those of other states, Singh said speaking at the Republic Day celebrations in Rohtak, where he also unfurled the tricolour, according to an official release here.

The only surviving member of the Constituent Assembly, Ranbir Singh, who is father of Chief Minister Bhupinder Singh Hooda, was special invitee at the function. Birender Singh said that the present Government has not only withdrawn ban on filling up of vacancies, but also provided employment to about 20,000 youth during last about 34 months.

A target has been fixed to provide jobs to more than one lakh youth in next two years, he said, adding it was a matter of great pride that Haryana was ahead of many other states in financial management.

"The State ranked at number two after Goa in per capita income," he said.

He said that new schemes involving an investment of Rs 600 crore have been initiated to enhance the socio-economic status of members belonging to Scheduled Castes, Backward Classes and economically weaker sections of the society. Singh paid rich tributes to the martyrs and freedom fighters.

A colourful cultural programme was also presented by the school children and 16 tableux were taken out to project the developmental strides made by various departments.

Thursday, January 24, 2008

Today reports indicated that the defence is settling for a pay hike of 2.5 times basic. Already a 50% merger of DA is existing. Hence the effective hike will be only 1.66 times. Does this applies to other division also? Post your replies in the comments

The report

The Defence Minister A. K. Antony has suggested that the Sixth Pay Commission was likely to favourably consider the armed forces' demand for 2.5 times raise.

Antony expressed concern over rapidly falling enrollments in armed forces academies and shortage of officers. He attributed this to pay packets being better in the private sector.

"Children these days have many options and the pay packets are much better outside than what the armed forces are offering," he told newsmen.

"For the first time the armed forces have put their best foot forward by presenting unified proposals to the Sixth Pay Commission," the Defence Minister said.

He also expressed optimism that men in battle fatigues "would get a better deal this time". The armed forces have sought 2.5 times hike in salaries and perks for its men.

Antony also said his ministry would soon approach the Central government for approval of the second phase of married accommodation project to meet the shortfall in accommodation for large number of soldiers who are living away from their families.

"Government will work on war-footing to execute the housing projects," he said.

Source : Sahara Samay

Wednesday, January 23, 2008

Don’t worry much about the plummeting Sensex if you are a Central Government employee. The 6th Pay Commission is all set to make 33 lakh Central Government employees smile by recommending almost 3.25 times increase in the basic pay across the board, below the level of joint secretary.

The higher up babus – joint secretary and above – would also be a happier lot, if commission’s recommendations are accepted by the government.

According to sources in the Finance Ministry, the Pay Commission has recommended fixed basic pay of joint secretary at Rs. 60,000, additional secretary at Rs. 70,000, secretary’s at Rs. 75,000 and cabinet secretary at Rs. 80,000, excluding the house rent allowance and some other benefits.

The salaries of joint secretary to secretary level officer ranges between Rs. 40,000 to Rs. 60,000 as per the current pay package. And those at the bottom of the hierarchical ladder – have an added reason to feel good.

Taking a cue from the private sector, the Pay Commission has recommended doing away with the age old drab nomenclature of peons, lower division clerks (LDC) and upper division clerk (UDC) and give them flamboyant designations of office assistant, junior executive and executive.

With possibility of mid term elections gathering momentum, the government is expected to carry out Pay Commission’s recommendations to the letter to make the sizeable vote bank still happier by giving them benefits with retrospective effect from January 2006.

The proposal is being vetted by the government – by the Prime Minister’s office as well as the Finance Ministry. Bureaucrats concede that the recommendations, if carried in full, would make a huge impact on the government exchequer but they counter that it won’t be a bad bargain for the government, especially in view of much steeper rise in private sector salaries.

“If the government accepts 3.25 times increase, it won’t be much off the mark than the 5th Pay Commission which also recommended similar increase. If you compare it with the private sector, salaries have increased by at least 5 to ten times since 1996 when the 5th Pay Commission was implemented,” said a senior bureaucrat.

The three armed service might be fighting with each other on creating more top level posts, they have decided to rally together to get better pack packets from the Sixth Pay Commission.

Defence Minister A K Antony on Tuesday said that for the first time Army, Air Force and Navy will be putting their best foot forward by presenting a unified proposal to the Sixth Pay Commission.

Sources said that the services are seeking a substantial jump in the salaries so that they could match up with pay packets in the corporate sector. The officials fear mass exodus if a substantial hike is not given to the three services.

The Ministry of Defence is backing the case of the service official as A K Antony has said on several occasions that the salaries in the armed forces needs to be revised substantially. The armed forces are already struggling to cope up with shortage of officers. If the salaries are not hiked to the expectation, the problem will become worse.

Better career options in the private sector have already made it difficult for the armed forces to attract youngsters. The officials said that as of not alarming, but if the pay packets are not increased, it would be difficult to prevent people from leaving the service.

Those in the ranks of lieutenant colonel and colonel are going to be the biggest sufferers, said sources. The MoD is estimating that there can be a large number of officers in the middle ranks who could be leaving the service.

The Army is already facing a problem of 11,000 officers. The MoD is trying to address the issues being faced by the officers. The attrition rate is a problem in the Indian Air Force also where the boom in the civil aviation sector is luring pilots.

The MoD will soon be approaching the government for approval of second phase of married accommodation project to meet the shortfall in accommodation to a large number of soldiers are living away from their families. The measure is part of making service conditions of officers better.

The Delhi University Teachers’ Association (DUTA) sent its final draft for revision of salaries of teachers to the sixth Pay Commission earlier this week. The Commission had asked for the recommendations in October 2007. A meeting between the two is expected next week.

The Commission was set up by the University Grants Commission in 2007. Some of the points taken up by the DUTA include increase in salary, endowment of professorship, one month's basic salary as medical allowance, fast track promotion scheme. If the recommendations are approved, the average income of a Reader in Delhi University can go up to Rs 60,000 from the current Rs 18,400.

“The recommendations are made in order to retain talent in the teaching profession,” Aditya Narayan Mishra, DUTA president, said. According to him, the last seven years have seen a massive diversion of talented youth towards professions with better packages and deals. “When I became a teacher in 1970s, teaching was the second preferred choice. Now teaching ranks in the ninth position. We have to get back our youth and an attractive package is the best way to do it,” Mishra said.

According to Sunil Tiwari, teacher in Bhagat Singh College, the Commission had specifically mentioned that the recommendations should be made on “how to attract and retain talent in higher education”.

“It took two months and 10 meetings to come up with the final draft," he said. Members of DUTA are hopeful that the new recommendations will also be observed for revising the payment of teachers in other universities of India. “But all this may take a lot of time,” a member said.

At present, however, the immediate demand of teachers is professorship in Delhi University. “Without professorship (promotion), it will be difficult to attract people because in all other professions, promotion is performance based and not based on the number of years put in,” Mishra said.

Seventy per cent of the 8,000 teachers in DU have seen a stagnation in salary and position for the past 10 years. In 1998, the Pay Commission had introduced professorship in DU but the UGC withdrew it in 2000. It takes a teacher a minimum of 11 years of research and teaching to attain the position of Reader, the highest position in DU.

Monday, January 21, 2008

Commensurate with the status of the high offices that they hold, the government recently announced a doubling of the salaries of the President and vice-president, and increasing emoluments for governors. The last pay hike for dignitaries holding the highest constitutional posts was in 1996. This has triggered a debate where many feel that the exercise of power and the opportunity to shape the nation’s destiny should transcend considerations of financial reward.

Whether or not these pay hikes would serve as a benchmark for the Sixth Pay Commission is a question that has no easy answers. The stock Markets are booming, the Economy is doing well and foreign investors are eager to set up shop in India. Trade unions and government employees’ associations would be tempted ask why their own salaries should not match skyrocketing wages in the private sector.

With the Fifth Pay Commission’s call over ten years ago to downsize government by a third not taking place, the task of the current commission becomes onerous. Eminent economist and member of the last pay commission Suresh Tendulkar notes that while it is necessary to pay better salaries at higher levels, to do so, the number of posts at such levels need to be reduced. Only then could the numbers below be reduced.

One possible solution, widely used in the private sector, is to bring in performance-related pay (PRP), where a variable part of pay is awarded depending on performance. Many OECD countries have had PRP for decades. PRP can foster individual motivation at the senior level and help compete effectively with the private sector for talented employees. The government could use PRP as a way of containing the wage bill by reducing automatic progression through salary levels and refuting the common perception that civil servants are unaccountable and overpaid by demonstrating that their performance is monitored.

The one note of caution to be borne in mind is the objectivity in rating performance. Measuring performance through performance appraisals is a difficult process. The tendency is to rate the maximum number of civil servants as ‘fully satisfactory’ or better. The emerging trends are to distinguish between top and bad performers, and by using quota systems and forced ranking systems to specify the proportion of employees placed in higher categories. The Sixth Pay Commission has, therefore, assigned a study to IIM-Ahmedabad to examine the feasibility of PRP in government—a step in the right direction.

Friday, January 18, 2008

Chief of the Indian Army Staff, General Deepak Kapoor, said Monday that the modernisation of the army was being stepped up with the induction of the Pinaka (multi barrel rocket launcher), and Brahmos missile systems.

General Kapoor said that the Army is in the process of inducting the Smerch multiple launch rocket systems soon. "The Akash missile system has been tried and tested for Air Force. The Army has not conducted trials and some of our expectations are still to be met," General Kapoor said while explaining the delay in the induction of Akash missiles into the Army.

When asked about delay in transfer of technology for the T-90 tanks, the Army Chief said that it is a complex process and in future "we would avoid such kind of delays," adding the Centre has already approved induction of 347 tanks.

He admitted that artillery modernisation was not going as per plans and there was a set back because its earlier trials were not satisfactory.

He also said that though the modernisation of the army was an ongoing process, at the same time "we need to improve human resource potential for the Army."

Admitting that there is shortage of approximately 11,200 officers in the Army, General Kapoor said that this would not compel them to compromise on the quality in the selection process. Talking about the lack of attraction towards the armed forces as a career option, he said all the organisations have to take youth from the same resource pool and corporate world is ready to pay much more.

General Kapoor sounded optimistic that the Sixth Pay Commission will address the situation and make recommendations, which would ensure that a career in the Army would be more lucrative. When probed further he said, "We haven't come to the stage to have compulsory military service for all in the country."

Commenting on prevailing situation in Jammu and Kashmir, he said situation is better in the state and violence has been down by about 55 per cent as compared to the past.

Monday, January 14, 2008

With an eye on general elections, the ruling Congress party instructed its government to present a people-friendly budget next month.

The party told the government in no uncertain terms on Thursday that the burgeoning middle class must get some relief and benefits in the budget.

There are suggestions that the government may increase the ceiling on income tax exemption from the existing Rs120,000 per annum to Rs200,000. This would give a big relief to the middle class.

Prime Minister Manmohan Singh and Finance Minister P. Chidambaram were among various senior ministers who attended the meeting held at party chief Sonia Gandhi's residence.

The Congress party is also banking heavily on the Sixth Pay Commission, which is currently reviewing salaries and perks of all central government employees. Its recommendations could affect more than 4 million government employees. Government employees and their families play a decisive role as voters during elections and the Congress party wants to get into their good books. "We had come to power promising to look after common man and our next budget would definitely prove that we are indeed committed to this promise," the Congress office-bearer said.

Friday, January 11, 2008

The Indian army, which was once led by elite of the society including princes of erstwhile royal families, is not considered an attractive career option in the era of globalisation.Many more career opportunities are available to young men, which offer attractive salaries and status. The Defence Ministry is engaged in the task of making a career in the Armed Forces and the Defence Research and Development Organisation more attractive.This was disclosed by the Defence minister A.K. Antony on the sidelines of a function to mark the golden jubilee celebrations of the Defence Research and Development Organisation (DRDO) on Wednesday that there was need to give the country’s armed forces and scientists “better treatment” and “a new deal” this year.The Sixth Pay Commission is examining the issue. Commenting on the lack of attractiveness of the armed forces as a career option among today’s youth, Antony said, “With the new economic boom, talented people are getting better packages (in other career avenues). We must give them (armed forces and scientists) a new deal in 2008,” he added.The remarks of the Defence Minister are not enough and concrete steps are required to stop the number of officers who have applied for premature retirement (PMR) or have already proceeded on PMR.In the year 2004, 435 officers applied for premature retirement and 290 proceeded on PMR. Next year was no different, 536 applied and 365 took PMR. In 2006 officers applying for PMR increased with 811 applying for it and 464 taking PMR.The year 2008 saw further rise in number of officers with 1095 applying for the PMR and 575 officers proceeding for the PMR.The Army is facing a shortage of 11,371 officers, mainly in the ranks of Lieutenant Colonel and below. The Government has taken several measures to enhance recruitment in the Army, but the glamour of serving in the army is wearing off.Lack of a decent stipend, limited growth opportunities and tough working conditions have been blamed for the trend.A senior officer said that the money that officers get for the kind of tough jobs they are doing is inadequate. The poor salary of army officers is driving away potential candidates, the officer adds.Today there are many avenues open to boys and girls and the Army is not one of the preferred ones amongst young people, he said.It’s true that no career option can match the glamour of serving in the Army, but status and glamour have proved not attractive enough. The Indian Military Academy and the National Defence Academy for the first time have been unable to fill their quota of officer cadets.In the National Defence Academy at Pune , the capacity is 300 and only 190 joined and at the Indian Military Academy in Dehradun only 86 cadets joined when the capacity is 250. What is more worrying is that 148 managed pass the Combined Defence Services (CDS) examination and out of this, 62 candidates opted out and did not join the course.The Army is optimistic that the Sixth Pay Commission will address the situation and make recommendations which would ensure that a career in the the Armed Force would be more attractive.

Thursday, January 3, 2008

All the central government employees will be happy to listen that the sixth pay commission most probably will be effective from April-2008.According to Shri B.N.Srikrishna,Chairman,Sixth pay commission, the commission was formed on 05th October-2006 and it will suppose to give its report to the central government within 18 months.There is a rumour in the media that the commission has submitted an interim report.But that's not true.The commission may give its report to the government before the general budget session i.e.before 28th February-2008.According to a ministerial source, the commission is going to give 16s special benefits to the employees.There will be performance linked incentives to the employees.So, they will have to take additional responsibilities.Their annual increments will also be based on their performance.Indian institute of Management, Ahmadabad is helping the commission to make the report.Based on the Market Price Index,the DA hike will be 6% from January-2008 for central government employees.

Tuesday, January 1, 2008

Government today denied that there is any proposal to increase the retirement of the Central Government Employees in the sixth pay commission report or budjet.

Following is the text of the Press Statement issued by the Department of Personnel & Training, Ministry of Personnel, Public Grievances and Pensions today, to clarify that there is no proposal before the Government regarding raising the retirement age of Central Government employees from 60 years to 62 years :-

"Attention of the Government has been drawn to reports appearing in somesections of the media regarding raising the retirement age of Central Governmentemployees from 60 to 62 years. In order to put at rest all such speculations, it is clarified that there is no such proposal before the Government."

The impressive improvement in income tax compliance has encouraged the finance ministry to consider an increase in the exemption limit for the country's 30 million taxpayers.

The exemption limit was likely to be raised by about Rs 25,000 to Rs 40,000 in Budget 2008-09, sources close to the development said. This would mean that, instead of having to pay income tax when one's annual salary touches Rs 1,10,000, the threshold would be Rs 1,35,000. An increase in the exemption limit by Rs 10,000 translates into savings of about Rs 1,000 for every tax payers. The tax break would cost the government about Rs 1,500 crore.

Sources said, income tax rates for individual and corporate taxpayers were unlikely to be re-jigged once the limit was raised. "With the buoyancy in direct tax revenue, we felt that some relief can be given to taxpayers. Otherwise, the rates for the taxpayers are unlikely to see any change," a government official said.

Tax collection has registered growth of over 40% this fiscal to touch Rs 1,64,407 crore until December 15. The finance ministry expects the direct tax collection to cross Rs 3,00,000 crore this fiscal. With expectations that this trend of plenty will continue in the next fiscal as well, the ministry feels that providing reprieve to taxpayers is a good idea.

In Budget 2007-08, the government had raised the exemption limit by Rs 10,000 to Rs 1,10,000. Finance minister P Chidambaram had said the measure was aimed at rewarding taxpayers for the increase in receipts.

The coming Budget just might be the last full Budget for the UPA government. The general elections are slated for 2009. Re-setting of the income tax structure is a popular measure, and the demand for this is likely to be intense this time around. The Sixth Pay Commission will push up the tax bracket of all government employees and so, the move to raise the limit is expected to keep their tax liabilities fairly neutral. The proposal is also a part of the carrot-and-stick policy by the finance ministry, which plans to provide this relief to tax payers and at the same time focus on greater compliance.

Currently, people in the slab of Rs 1,10,000-Rs 1,50,000 pay income tax at a rate of 10% on their earnings.

Income between Rs 1,50,001 and Rs 2,50,000 attracts 20% tax, while those earning above pay 30%. This excludes the education cess of 3% on